Dem breaks with Obama on financial reform

By Caitlin Taylor

Jun 17, 2009 10:30am

ABC’s Z. Byron Wolf reports: As President Obama and his economic team prepare to unveil a wholesale update of how the financial sector is regulated, their ideas are running into opposition from at least one Democrat. In a speech on the Senate floor Tuesday, Sen. Mark Warner of Virginia, a successful business man before he entered politics, said he shares “the broader goals” of the administration in bringing systemic reform to the financial industry, but he opposes vesting much more power in the Federal Reserve, as the Obama administration proposes. “There are already tensions between the federal reserve's responsibilities for the conduct of monetary policy and responsibilities for bank supervision,” said Warner in a speech on the Senate floor that began at 3:13. “Adding this additional responsibility on the federal reserve, I believe, is a step too far. my other concern is rooted in the philosophy of this country which I think has quite honestly served us well. that philosophy is that too much economic power placed in one place puts our system of government at risk. our founding fathers opposed that concentration of power, economic or otherwise, in favor of a system of checks and balances.” Warner wants to see a beefing up of  the existing regulatory system and the creation of a sort of systemic risk council, that would take a longer view and plug the regulatory holes amid the current alphabet soup of regulators. Warner’s opposition is a sign that the president and other Democrats in Congress will have some convincing to do, even among members of their own party, if they want to re-craft the regulatory system that missed the warning signs of the financial meltdown.

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